Foreign spaza owners told reporters last week that recent violent looting in Soweto was due to allegations of fake food in the town. (David Harrison).
comment
Dormitory style, lack of services, poor security, overcrowding, and noise characterize living conditions in most South African settlements. They remain imagined, spatially separated and alienated from mainstream economic activity.
A dusty road full of potholes that gets muddy when it rains. There are rows of chemical toilets outside the house, and the air is filled with stench from open toilets and clogged pipes. Overcrowded, small matchbox-style houses. And the distribution of recreational facilities is limited. This is the reality in townships, even in parts of Soweto that appear to have been modernized.
After South Africa's political transition from apartheid, in addition to the granting of political and socio-economic rights and the development of a welfare state, spatial, infrastructural and economic reforms of townships were undertaken to correct intentional problems. It was thought that immediate attention would be paid to Alienation and underdevelopment.
This was not the case and was probably an important oversight in reform efforts early in the transition to democratic government. The inherited neglect of townships largely continues, and even efforts to revitalize townships have stalled both conceptually and practically.
Limitations
Since these townships were never considered to have any development potential, the main difficulties they have to face in terms of economic development and limited economic revitalization are their space and location.
The costs associated with this would be astronomical as input costs are unusually high. First, the topography of the township's land is difficult to excavate and develop. Second, costs are complicated by the distance of townships from central infrastructure and service points, such as water sources, power grids, major highways, and other infrastructure connected to commercial and industrial hubs. Additionally, poor road and rail networks in and out of these areas make transporting goods, services, and people costly.
As a result, the logistics and supply chains to and from settlements vital to manufacturing and industry remain undeveloped and underserved. Even when infrastructure, amenities, and services become available, their costs are so high that the average town resident or business cannot afford them because of their lower-than-average incomes and sales. .
The expectation after 1994 was that excluded and marginalized people in residential areas would be relocated to cities and near urban areas. This was basically not a reality and was mainly an option reserved for small and medium-sized enterprises, developing companies, professionals, engineers, and managers. And where this has happened, especially in affordable, middle-class suburbs close to cities, there has been a mass exodus of former (white) residents and capital flight, and an associated decline in real estate investment and property values. .
This deprives investment and hollows out the strong middle class that could have contributed to the town's economic development, especially in the commercial and service sectors, which are less dependent on heavy infrastructure than manufacturing and other industries. This had a double effect.
Internal migration from non-metropolitan areas and rural areas has moved lower classes into townships, proliferating informal settlements and overburdening already sparse services and infrastructure.
The government's response was to provide RDP housing and some public housing for middle-income earners. These serve social needs but do not create economic value.
Add to this the lingering legacy of anti-apartheid fee and tax boycotts, illegal and irregular service connections (water, electricity, telephone), and the relatively low collection of service fees and charges from townships by local councils. All of this weakens essential services. A revenue base that helps the proliferation and circulation of money.
Traditional problem
Efforts to stimulate the township's economy are primarily focused on infrastructure development in the service sector and limited commercial sectors such as retail banking, restaurants, small-scale retail, and the duplication or establishment of large national chains at the micro level. The focus has been on service. Malls and small industrial parks in Orlando West, Soweto.
However, these have limited capacity to absorb labor and limited potential to develop markets, hindering revenue generation. As a result, this dims the prospects for rapidly replicating, expanding, transferring, or scaling these efforts to other areas.
This is in contrast to the microeconomy and businesses operating in the formal economy. Micro-economies and businesses have established comparative and competitive advantages and subsequently continue to enjoy growth, expansion, and success thanks to their strengthened strategic positions. They benefit from new business development incentives and subsidies, technological advances, and inherited economies of scale.
Of course, it must be noted here that, in addition to the global food, fuel and financial crises, South Africa's divided and divided political climate, low growth and high unemployment rates have also meant that formal sector businesses have also experienced some stagnation. This means that they are experiencing.
Efforts to connect township economies with existing urban and suburban economic, commercial, and industrial nodes have provided a glimmer of hope for township revitalization, but have limited ways to integrate townships into the mainstream economy. It is being
One of the common laments from these efforts is the lack of an “entrepreneurial culture and spirit” on the block. But nothing could be further from the truth.
The township economy, even in the informal sector, demonstrates the creativity and resilience of its residents, bridging apartheid's spatial and economic exclusion. For example, people created makeshift township economies as an alternative to high transportation costs associated with commuting to mines, homes, gardens, factories and offices, economic centers, shopping malls, and retail centers. .
This has led to a proliferation of unlicensed kiosks and spaza shops that generate survival income for the unemployed, a hitherto unregulated commuter minibus taxi industry, the development of stokvels and savings clubs as a means of raising funds, roadside stalls, and pubs. and restaurants, and unregulated home and backyard mechanical maintenance. , panel beaters, spray painters, barbers, salons and hair salons, shoe, sandal and bag manufacturers and repairers, sewing and haberdashery shops, tire retreaders, carpenters and cabinet makers, upholsterers and furniture refurbishers.
This list includes roadside auto-electronics entrepreneurs and retailers of low-cost sunglasses, earphones, perfumes, home and car phone chargers, leather belts, watches, wallets, hair and nail clippers, shoes and nail polish. Please add. The key to this group's survival is its mobility and ability to scan and analyze sales prospects on an ongoing and ad hoc basis.
Entrepreneurs in non-mobile townships mainly operate their businesses from stalls of about 3 square meters located around shopping malls and retail centres.
little understanding
Understanding the culture, motivations, networks, and practices of this informal, unlicensed, and unregulated economy is critical to economic development, formalization, integration into the formal economy, and the fundamental commercial, financial, and financial implications of these sectors. , essential for the provision of business support services.
One such initiative is to group and cluster businesses in townships for the purpose of providing services, creating markets, and regulating them in designated spaces such as incubation hubs, innovation centers, and industrial parks. The purpose is
However, practices such as clustering and organizational forms are counterintuitive to how to enhance these businesses. First, group and cluster approaches stifle the agility and maneuverability of entrepreneurs and end up destroying this class of entrepreneurs.
In revitalizing the township's economy, policymakers must grapple with seemingly irresolvable contradictions. The contradiction stems from the fact that when businesses and vendors come together, it is easier for the government to provide services, creating economies of scale for the state.
However, businesses may be reluctant to be grouped and clustered with competitors offering the same range of goods, products, and services.
From a policy perspective, the first problem to recognize is the limited scope of current township revitalization strategies. Their implicit focus on townships in Gauteng, with Soweto idealized as the benchmark for township development, leads to the neglect of townships in other regions.
Second, considering the national economic development needs and requirements of townships, the national treasury allocation for township revitalization is too small. We need to scale this up.
Third, we need to reconsider the lopsided allocation of planning resources, with 90% of funding allocated to technical assistance and only 10% to infrastructure development. Addressing these three policy challenges would be a good start for a growing township economy.
Mr. Ntemebuko Nkapela is the coordinator of the township economic program and Mr. Ebrahim Fakir is the program director of the Awwal Institute of Social and Economic Research.